How much do you really need to retire on?

A question I often get asked is “How much money should I have saved in order to retire?”

But before I answer this question, there are a number of variables we need to consider which might just change our estimates.

Firstly, having an idea of what sort of lifestyle you would like in retirement is a good starting point when determining how much you need to retire.

If you have paid off your mortgage and own your own home outright you might need less than other individuals.

However with house prices increasing and home ownership becoming less realistic for more Australians, some financial assumptions should be challenged.

According to recent data released by the Association of Superannuation Funds of Australia (ASFA), those retiring in Sydney will need a further $500,000 to retire in comfort if they don’t own their home outright. So an individual that is renting will need $1.05 million, while a homeowner may only need $545,000 to maintain a similar standard of living in retirement.

So what is the solution?

Whether you own your home outright or continue to rent during retirement, there are a number of things you can do today to improve your standard of living during retirement.

  • Planning for the future

Like health goals, you need to plan for not only a longer life expectancy but for a future where you factor in living costs such as housing, energy, food, health care and other living expenses.

  • Investing for retirement

Investing for the long term is paramount if you want your money to last into later life.  Create an investment strategy, review it as it matures and ensure you are equipped with the right advice to see it grow over the long term.

  • Structure your money

Ensuring your investments and finances are structured appropriately is essential in making sure your money lasts as long as possible. Strategies to minimise your tax or perhaps using a family trust are just a few things you must get right when structuring your investments.

Want to know how 7 Wealth can help you plan for a better retirement?


7Wealth Pty Ltd ABN 44 609 210 246, is an Authorised Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327 Australian Financial Services Licence 232706 and Australian Credit Licence 232706
This blog contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. If you decide to purchase or vary a financial product, your financial adviser, and other companies within the AMP Group may receive fees and other benefits. The fees will be a dollar amount and/ or a percentage of either the premium you pay or the value of your investment. Please contact us if you want more information.
October 31, 2017